Related Acquires Quiet Logistics to Reach Digitally-Native Brands

On episode 19 of the E-Commerce Retail Briefing Podcast: Promising performance results are coming in for video ads on Reddit, and the real estate firm behind Hudson Yards is making a big bet on upstarts. Plus, headlines from RH and eBay.

 All successful businesses – regardless of size – have to make decisions about customer service support. As business owners weigh the pros and cons of outsourcing customer service, they’ll inevitably bump into the biggest guy in the room: the call center. While it’s a tried and true solution for large corporations, smaller businesses and startups should tread carefully when considering the call center.

Here are a few reasons why call centers aren’t a good fit for small businesses:

Here are the week’s retail headlines:

  • On Thursday, RH (formerly known as Restoration Hardware) reported record revenue in excess of $2.5 billion. Q4 adjusted net revenues were up 7% percent. 
  • E-Bay is jumping into the discount game. It recently announced that it’s rolling out a series of Prime Day-style discounts over the course of multiple days. Each day has a product theme: for example, connected home, gamer gear, fashion, home improvement, and so on. The announcement goes hand-in-hand with the company’s price-match guarantee, which targets fellow online retailers Amazon, Best Buy, Home Depot, Walmart, and more.

Reddit Ads Yield Promising Results

Reddit’s emerging ad business is starting to pique the interest of advertisers. Alcohol giant, Pernod Ricard, tested a mix of short and long video ads for Absolut Vodka back in Q4. The ads played automatically in subreddit forums dedicated to specific topics on both mobile and desktop versions of the site.

Absolut targeted the ads to key audiences in subreddits on topics tied to areas such as “funny” and “LGBTQ.”

  • View rate for the longer, 30-second ads were double the Reddit benchmark.
  • View completion rates for the shorter 8-10 second videos were 2.5% higher than Reddit’s benchmark.

Click-through rates were low at 0.5% percent, though they were not the main KPI for this campaign.

The mix of longer and shorter ads on the site led to an 8% increase in top of mind awareness for Absolut among users who had not previously purchased the vodka. The company found that the results were solid enough to continue advertising on the platform.

While there’s risk of advertising on Reddit – brand safety, for example – there’s also a unique advantage. Reddit is built on a foundation of self-regulation and moderation to keep subreddits on track. That same level of moderation can easily be applied to advertisers on the platform.

Related Acquires Quiet Logistics to Reach Digitally-Native Brands

Hudson Yards has officially been open for one week. The 18 million square-foot real estate development on New York’s West Side includes space for retail, performance arts, and public gatherings. The area’s “Floor of Discovery” is devoted to digitally-native retailers that are dipping their toes into the brick and mortar space. Storefronts include LovePop, Mack Weldon, M.Gemi, Rhone, and Stance.

Related, the real estate firm behind Hudson Yards, announced last week that it was co-acquiring Quiet Logistics with Greenfield Partners, a real estate management firm.

Quiet Logistics works with over 60 digitally-native brands, including Away, Bonobos, Tuft & Needle, and Outdoor Voices.

As some background, Related is not your typical real estate firm. As Loose Threads notes, the company is “one of the most sophisticated and vertically-integrated real estate companies out there.” It doesn’t just sell space, it invests heavily in the growth of its tenants.

In 2005, the company purchased Equinox and helped turn it into the luxury fitness powerhouse it is today. Additionally, it purchased and invested in SoulCycle, Blink Fitness, and Rumble.

Related’s acquisition of Quiet Logistics is notable for a couple reasons:

  • Rising fulfillment costs are a major threat to digitally-native brands. More brands than ever are rejecting Amazon Fulfillment Services, mainly to avoid sharing their data with the Giant. Companies like Quiet Logistics have a ton of opportunity ahead of them. Tapping into Related’s resources will allow Quiet Logistics to expand faster, operate more affordably, and offer faster delivery in more cities.
  • The acquisition confirms that real estate developers are looking to digitally-native brands in order to fill their spaces with exciting upstarts. Hudson Yards actively pursued these companies, offering them discounts and/or preferred services from Quiet.

If past success is any indicator, Related’s acquisition of Quiet will have a major impact on its ecosystem of retail tenants.